Periodic density functional theory calculations were performed to address the geometric and electronic structure of a Pd/4-aminothiophenol/Au(111) metal-molecule-metal contact. In a systematic approach, we first determined the adsorption of single 4-aminothiophenol (4-ATP) molecules on Au(111). Like other aromatic molecules, 4-ATP molecules adsorb preferentially at near-bridge sites in a tilted configuration. Since self-assembled monolayers (SAMs) are typically prepared in an aqueous environment, we also studied the interaction of water with 4-ATP finding a negligible influence of water on the 4-ATP/Au(111) bonding. A Pd monolayer is only weakly bound to an intact 4-ATP double layer on Au(111) via a single Pd-NH(2) bond. However, the strong H-Pd interaction induces the dehydrogenation of the amino group which results in a much stronger 4-ATP-Pd bonding. This also causes a drastic decrease of the local density of states near the Fermi energy and a down-shift of the d-band, in good agreement with the experiment. Strongly bound sulfur-and nitrogen-containing adsorbates on top of the Pd layer would also lead to a decrease in the density of states at the Fermi energy.